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How to insure your rental home

Whose insurance covers water damage in the home? Who is liable if if someone breaks into your basement storage unit?

Questions like these are familiar to Laura Lithenius, a lawyer working with legal matters in SATO’s Housing Business. Read on to learn what residents should insure and what’s worth keeping in mind for smooth everyday living.

These are insured by SATO:

Real estate insurance

This insurance covers damage to the property itself, including structures, fixtures belonging to the building and fixed fittings such as kitchen cabinets – as long as the damage has not been caused by the tenant.

“SATO’s insurance covers, for example, water damage caused by a sudden and extensive pipe failure,” Laura explains.

The excess on real estate insurance is significantly higher than the excess on a tenant’s home insurance.

Please note that real estate insurance does not cover damage to the tenant’s personal belongings.

Real estate liability insurance

SATO’s real estate liability insurance covers situations where a structural element of the property causes a tenant to suffer injury or material damage, for example when a cabinet door falls off and damages personal property.

Four electric guitars on a stand next to a wall.
Home insurance protects your belongings.

Insurance the tenant is responsible for:

Home insurance that includes liability insurance

This is the only mandatory insurance in all SATO rental homes.

“Home insurance must be valid throughout the entire tenancy. This is something the tenant commits to in their lease agreement,” Laura reminds.

Home insurance primarily covers the tenant’s personal belongings, yet it must also cover the home’s fixed fittings and furnishings, for example surface materials and cabinetry. If there is water damage in the apartment for which no one can be held liable, SATO’s insurance covers the damage to the building structures, while the tenant’s home insurance covers damage to personal belongings and the fittings of the rental apartment. Home insurance also covers damage to personal property in the event of a storage unit break-in.

A person locking a storage unit door with a padlock.
Always keep your storage unit locked, as insurance usually does not cover property stolen from an unlocked storage space.

Home insurance may also include cover for extra living costs if damage to your home means you need temporary accommodation.

The liability insurance included in home insurance covers damage caused by the tenant’s own actions to the apartment or to a third party.

According to the law, the party that causes the damage is liable. Put simply: whoever is at fault pays.

if a bunch of keys forgotten in a trouser pocket damages your washing machine and water leaks into a neighbouring apartment, liability insurance may cover the damage to both your own apartment and the neighbouring apartment and its belongings, so you do not have to pay out of pocket.

Another common cause of damage is a dishwasher inlet hose that has not been capped. When a tenant moves out and takes the dishwasher with them, the capping may be forgotten altogether or done poorly. In the worst case, this can cause water damage for which the tenant is responsible.

Home insurance and liability insurance are for the resident’s own protection, and it is important that the tenant reports the damage to their own insurance company as soon as possible after such an incident.

It is worth noting that liability insurance policies vary in scope and their terms and conditions differ.

“So remember to familiarise yourself carefully with your own insurance,” Laura reminds.

Pet owner’s liability insurance

This is insurance that every pet owner should consider. Sometimes pet owner’s liability insurance also covers damage caused by the pet to the apartment. The extent of cover should always be confirmed with the insurance company before taking out the policy.

Under the act on residential leases, normal wear and tear of an apartment is to be expected. However, for example interior doors scratched by cats or skirting boards chewed by a dog are the tenant’s responsibility to compensate for when moving out.

A small white dog stands indoors behind a chair with its tongue out, looking upwards. People’s legs can be seen around it
Pet owner’s liability insurance may cover personal injury or property damage caused by your dog to others.

The most common types of damage in SATO homes are relatively minor and do not even end up on the legal department’s desk for investigation. Fortunately, major damage is rare in everyday life.

The piece was originally published on 31 october 2018 and it was updated on 15 January 2026.